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January 2019

National & Regional Economy

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 National Economy

  • Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018, according to the third estimate released by the Bureau of Economic Analysis.
  • Third quarter GDP growth reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, government spending and nonresidential fixed investment that were partially offset by negative contributions from net exports and residential fixed investment.
  • Real PCE, the largest contributor to GDP growth, increased at an annual rate of 3.5 percent in the third quarter, which was revised slightly down from the second estimate of 3.6 percent.
  • Real private nonresidential investment growth slowed in the third quarter to an annual rate of 2.5 percent, down from 8.7 percent in the second quarter. Meanwhile, real residential investment contracted 3.6 percent in the third quarter of 2018.
  • Inflation, as measured by the consumer price index (CPI), had a 12-month change of 2.2 percent in November, down from a reading of 2.5 percent in October. Year-over-year growth in core CPI, which excludes food and energy, edged up from 2.1 percent in October to 2.2 percent in November.
  • Payroll employment increased 0.2 percent in December as firms added 312,000 jobs to the U.S. economy. On a year-over-year basis, total employment grew 1.8 percent. Meanwhile, the unemployment rate ticked up 0.2 percentage point in December to 3.9 percent. The labor force participation rate also increased in the month from 62.9 percent to 63.1 percent.

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics

Regional Economy

  • Our most recent surveys suggested sluggish business conditions in the manufacturing sector and fairly steady growth in the service sector in the Fifth District. The manufacturing composite diffusion index fell from 14 in November to −8 in December. In the service sector, the overall revenues index rose from 5 in November to 10 in December. Survey results suggested continued employment growth in both sectors.
  • Employment rose 0.1 percent (19,500 jobs) in the Fifth District in November, as jobs were gained in all jurisdictions except the District of Columbia and West Virginia. Maryland gained the most jobs and saw the largest percentage change with an increase of 7,900 jobs (0.3 percent).
  • Since November 2017, employment grew 1.7 percent (252,000 jobs) in the Fifth District, matching the national rate. Employment rose in every jurisdiction, on a year-over-year basis, with North Carolina posting the strongest growth of 2.3 percent (100,700 jobs) over the year.
  • The unemployment rate in the Fifth District dropped to 3.5 percent in November, coming in below the national rate of 3.7 for that same month. Unemployment rates declined or held steady in November among all District jurisdictions, ranging from 2.8 percent in Virginia to 5.6 percent in D.C.
  • Since October 2017, home prices in the Fifth District grew 3.9 percent, trailing the national increase of 5.4 percent. Home prices increased over the year in every jurisdiction. West Virginia saw the fastest year-over-year home price growth of 10.1 percent, while the slowest growth was in Maryland and Virginia (2.6 percent, each).

Sources: Snapshot, Regional Economy, Bureau of Labor Statistics, CoreLogic

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Jim Strader (804) 697-8956 (804) 332-0207 (mobile)